Public debate on possible wealth tax launched

A committee set up to review South Africa’s tax system on Tuesday launched a public debate on one of the most controversial possible moves on its agenda – a wealth tax.

The Davis Tax Committee (DTC) announced it was inviting submissions from South Africans on whether the government should implement such a tax to lessen the glaring inequality in Africa’s most industrialised economy.

“The DTC was specifically requested by the minister of finance to inquire as to whether it would be appropriate to introduce additional forms of wealth taxation and the feasibility of doing so,” the team said in a statement.

“The distribution of wealth in South Africa is highly unequal.”

Appointed by former finance minister Pravin Gordhan in 2013 and headed by judge Dennis Davis, the Davis Tax Committee is tasked with assessing the role of the tax system in promoting growth, jobs, development and fiscal sustainability.

It said it was inviting submissions by the end of May on the desirability and feasibility of wealth taxes on land and property over and above those charged currently by municipal authorities, or a national wealth tax.

The committee plans to meet next month to discuss submissions.

President Jacob Zuma has called for a radical transformation of the economy following losses in local elections last year partly caused by anger over deep inequality that persists more than two decades after apartheid.

South Africa is grappling with weak economic growth and unemployment of more than 25%. The white minority still controls a disproportionately big share of the economy.

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COMMENTS 17

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So who is going to make these submissions as the article seems to be a bit of a nonsense as it appears that the submissions will come from those who want to impose this tax. If this be the case then all the regular players government, municipalities, trade unions will be lining up to put their case and the tax payer sucks the hind tit again

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18

“Inequality” is inherent to the human condition. There’s nothing that can be done about that – some people will always be more intelligent than other people; some can run faster than others; some can remember hundreds of consecutive digits at one glance. So lets discard this notion that we’re all equal right now – which at a stroke makes nonsense of the proposal that we should all be equally well off.
Let’s also understand that taking wealth from those who have it to gift it to those who don’t is ultimately self-defeating, because the former will simply pack their bags and go somewhere else where their earnings won’t be looted by others. While this will certainly improve the Gini coefficient (because ultimately the only people left will be poor) the obvious result will be a devastated economy and a starved and savage population.

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6

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4

What about a tax on those who benefited from BEE? We all know that it was intended to uplift all but benefited only a few. If they are taxed heavily, that money could go to those who did not see benefits from the programme?

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8

Perhaps a better solution would be an audit of how current tax money is spent/looted/allocated by government. I am sure that such an audit will highlight areas that can be considerably improved which will in turn lead to better utilisation of funds and an improvement in the welfare of all South Africans, rather than focusing on taxing the already overtaxed.

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6

The biggest problem with a wealth tax is that it requires a citizen asset registry.

Piketty himself is quite clear that raising revenue isn’t even what he’s after in the first instance; he seems to be most excited about doing a “great survey”, a Domesday Book, a list of names, portfolio numbers, and holdings.

After that it’s merely a question of what the Top Men say belongs to them.

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2

Exactly how many times should a single sum of money be taxed in one person’s hands?

We paid tax on the income we earned by working day and night. One should add – after studying for years and years and placing ourselves deep in debt in order to do so.
We then paid tax on the interest we earned, after investing (in stocks or money market accounts, say) the small amount we had left after tax.
We then paid tax on the dividends we earned on the stocks.
We then paid tax whenever we eventually sold the stocks. (STT)
We then paid tax on every investment we ever owned that miraculously managed to increase a little in value over the years. (CGT)
When then paid tax on what we left behind when we died. (estate duty)

Now, we may also be required to pay yet another recurring tax on whatever little we have managed to save, in spite of the fact that all the taxes that we already paid ON ONE AND THE SAME AMOUNT have made it almost impossible to save in the first place?

This is beyond ridiculous. I am seriously considering resignation from this warped and unjust society.

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2

The tax payers keep on paying while Stats SA recently showed that the black population increased by 50% since 1994. From 30m people to 45m people now. That is an extra 15m people that have to be fed, housed and schooled etc.

The social pact consist of small families, in not having more children than you can afford. The parents of every child that receives the child support grant are guilty of this. This in exchange for taxes – then we are making progress. If Namibia can have huge billboards telling people to have small families, so can SA.

Why should the people who plan their lives and families pay taxes for those who don’t.

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5

Politicians like Zuma and Malema miss-uses the term to imply that the poor are poor because of the rich.

If the rich are responsible, it takes away the initiative of the poor to do something about their plight, which obviously does not help the poor.

The real issue is poverty, fueled by millions of people, here and over Africa, moving away from subsistence farming in the rural areas, trying to get entry into the semi-industrialized economies around the cities.